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Wilmington Trust, N.A. v. Mahone
Citation: 2022 NY Slip Op 04580Docket: 2019-13449
Court: Appellate Division of the Supreme Court of the State of New York; July 13, 2022; New York; State Appellate Court
Original Court Document: View Document
In Wilmington Trust, N.A. v. Mahone, the Appellate Division, Second Department, ruled on an appeal concerning a foreclosure judgment against Nathaniel Mahone. The case originated from a 2014 unopposed motion by JPMorgan Chase Bank, which resulted in a summary judgment and order of reference against Mahone. In 2018, Mahone sought to vacate this order, alleging JPMorgan misrepresented compliance with RPAPL 1304 and questioned its standing. While his motion was pending, JPMorgan sought to confirm a referee's report and substitute Wilmington Trust as the plaintiff. The Supreme Court granted JPMorgan's motions and denied Mahone's request. On appeal, the court reversed the foreclosure judgment, rejecting the referee's report and denying JPMorgan's motions, ultimately remanding the case for a new report to compute the amount due and further proceedings. The appellate decision highlighted that the Supreme Court acted correctly in denying Mahone's motion to vacate based on CPLR 5015(a)(3), which addresses fraud or misrepresentation by an opposing party. A defendant aiming to vacate a default under CPLR 5015(a)(3) for intrinsic fraud must demonstrate a valid excuse for the default and present a potentially meritorious defense. In this case, the defendant's claims that JPMorgan misrepresented its compliance with RPAPL 1304 and its standing constituted intrinsic fraud allegations. However, the defendant failed to provide any excuse for the default, leading to the proper denial of the motion, making it unnecessary to evaluate the potential defense. Conversely, the Supreme Court should have denied JPMorgan's motions to confirm the referee's report and for a judgment of foreclosure and sale, as the referee's findings regarding the mortgage amount lacked substantial support due to reliance on unproduced business records. The matter is remitted to the Supreme Court, Richmond County, for a new computation of the amount due to the plaintiff and subsequent proceedings in line with CPLR 4403, followed by an amended judgment.